United States Government Accountability Office GAO March 2011 Report to Congressional Committees_part1 docx

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GAO
United States Government Accountability Office
Report to Congressional Committees
March 2011
FINANCIAL AUDIT
American Battle
Monuments
Commission’
s
Financial Statements
for Fiscal Years 2010
and 2009
GAO-11-320
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Accountability • Integrity • Reliability

Highlights of GAO-11-320, a report to
congressional committees

March 2011
FINANCIAL AUDIT
American Battle Monuments Commission's Financial
Statements for Fiscal Years 2010 and 2009
Why GAO Did This Study
Created in 1923, the American Battle
Monuments Commission (the
Commission) operates and maintains
24 American military cemeteries on
foreign soil; 25 federal memorials,

monuments, and markers; and 7
nonfederal memorials. For fiscal year
2010, the Commission incurred
program costs of $69.6 million to
maintain its cemeteries and federal
memorials.

In accordance with 36 U.S.C. § 2103,
GAO is responsible for conducting
audits of the agencywide financial
statements of the Commission. GAO
audited the financial statements of
the Commission for the fiscal years
ended September 30, 2010, and 2009.

The audits were done to determine
whether, in all material respects, (1)
the Commission’s financial
statements were presented fairly and
(2) Commission management
maintained effective internal control
over financial reporting. GAO also
tested Commission management’s
compliance with selected laws and
regulations.


What GAO Recommends

GAO is not making any

recommendations in this report, but
will be reporting separately on
matters identified during its audit,
along with recommendations for
strengthening the Commission’s
internal controls.

In commenting on a draft of this
report, the Commission concurred
with its facts and conclusions.
What GAO Found
In GAO’s opinion, the financial statements of the Commission as of September 30,
2010, and 2009, and for the fiscal years then ended, are presented fairly, in all
material respects, in conformity with U.S. generally accepted accounting
principles (GAAP). Also, in GAO’s opinion, the Commission maintained effective
internal control over financial reporting as of September 30, 2010. In addition,
GAO found no reportable instance of Commission noncompliance in fiscal year
2010 with selected provisions of laws and regulations tested. However, the
Commission did not provide an analysis of the agency’s overall financial position
and results of operations in Management’s Discussion and Analysis as required by
U.S. GAAP and OMB Circular No. A-136, Financial Reporting Requirements.
In a prior report (GAO-10-399), GAO identified a significant deficiency in the
Commission’s internal control over financial reporting as of September 30, 2009,
and a violation of the Antideficiency Act. In July 2010, the significant deficiency
was resolved by the President’s appointment of eight Commissioners, a significant
component of the Commission’s governance structure. The Commissioners
provide high-level strategic oversight of Commission operations, including its
internal control over financial reporting. The new Commissioners also approved a
delegation of authority to the Secretary in the event all Commissioner positions
become vacant. The Antideficiency Act violation was caused by a contract

containing a hold-harmless clause which subjected the Commission to potentially
unlimited liability. The violation was resolved by termination of the contract in
fiscal year 2009 and the Commission’s reporting of the violation in fiscal year
2010.
GAO noted other less significant matters involving the Commission’s internal
control and will be reporting separately to Commission management.

The Commission’s Suresnes American Cemetery in Suresnes, France
Source: American Battle Monuments Commission.


View GAO-11-320 or key components.
For more information, contact Steven J.
Sebastian at (202) 512-3406 or

United States Government Accountability Office
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